IR Leader
March 14, 2023

CIRI Issues Advocacy: CIRI Submission to CSA on Activist Short Selling in Canada

On March 7, 2023, CIRI submitted our recommendations on the Joint Canadian Securities Administrators' (CSA) and the Investment Industry Regulatory Organization of Canada's (IIROC) Staff Notice 23-329 - Short Selling in Canada. In general, CIRI believes that focused regulatory action is an appropriate response to address malicious short selling, particularly when utilized by activist investors issuing short reports that have negative implications on targeted issuers' reputation, valuation and shareholders. 

CIRI continues to recommend regulatory rules and policies that:

  • Require the activist short seller to provide any research report to the targeted issuer in advance of public dissemination to ensure factual accuracy;
  • Require all short sellers to disclose their opening, changes in and closing positions as well as their identity and that such disclosure be made daily;
  • Ban the practice that allows shares to be sold short without first borrowing the security;
  • Implement a 10-day minimum holding period that would apply to any short seller who opens a short position and disseminates market-moving information; and 
  • Include recourse for issuers when activist short sellers disclose inaccurate or misleading information.

To read the full submission, click here.